R&N takes legal action against regional rail authority

The Reading & Northern Railroad has filed a lawsuit seeking to stop a regional authority in eastern Pennsylvania from proceeding with what R&N is calling a “no-bid” contract for rail service.

R&N’s suit, filed in Lackawanna County Common Pleas Court, says that the Pennsylvania Northeast Regional Rail Authority “has a fiduciary obligation to the taxpayers of Lackawanna and Monroe Counties to get the best financial deal possible. The Authority refused to even consider our request to make a bid to be the operator. Instead, without notice and with no opportunity for public comment, the Authority decided to renew a contract with the existing operator for another five years. The Authority took this action even though the existing contract does not expire for more than 20 months. The last time the Authority sought bids for this operation was in 1993, more than 20 years ago. Since then it has continually renewed the contract with the current operator without notice and without consideration of whether other operators could increase the value for taxpayers. We connect with the Authority’s property and have extensive operations in the area today.”

“We realize that given an open process with fair bidding that there may be others who win the right to operate,” said Reading & Northern President Wayne Michel. “However, we know taxpayers and shippers will be better off as a result of this process and we will have had a fair opportunity to participate.”

According to its website, the Pennsylvania Northeast Regional Railroad Authority (PNRRA) is a 100-mile regional rail system stretching from Carbondale to Scranton through the Pocono region to East Stroudsburg and the Delaware Water Gap. It operates freight and passenger service in four counties in northeast Pennsylvania. Rail freight services are provided by the Delaware-Lackawanna Railroad Co. Inc. under contract with the PNRRA, which owns the rail assets and properties.